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Q4FY14 net loss rides higher at fashion retailer Kappahl
11
Oct '14
Despite posting growth in sales, net financial loss rode higher at Swedish fashion retailer – Kappahl, in the fourth fiscal quarter ending August 31, 2014,.

In the fourth fiscal quarter of 2014, net loss grew further to SEK 10 million from 7 million in the fourth fiscal quarter of 2013.

Kappahl posted a 3.2% hike in revenue in the fourth quarter of 2014 to reach SEK 1,185 million, up from SEK 1,148 million in the prior year quarter.

The gross profit for the quarter under review went up to SEK 703 million from SEK 654 million, corresponding to a gross margin of 59.3%, also up from 57.0% from the same quarter of 2013.

Kappahl said a good balance in inventories combined with a strong range has contributed to the stronger gross margin.

Selling and administrative expenses for the fourth quarter of 2014 amounted to SEK 611 million from SEK 597 million, excluding non-recurring items.

“The non-recurring item of SEK 23 million in fourth quarter of 2014 against SEK 14 million in previous year’s fourth quarter, refers to close-down costs for stores in Finland and Poland,” the retailer explained.

Operating profit during the fourth quarter of 2014 totalled SEK 92 million also up from SEK 57 million in prior year quarter, excluding non-recurring items of SEK 23 million and 14 million, corresponding to both periods, respectively.

Inventories at the end of the quarter under review were SEK 733 million from SEK 772 million. “In total, the size and composition of the inventories is assessed to be satisfactory,” Kappahl said.

Kappahl launched an internal project aimed at improving profitability in unprofitable stores in the previous quarter and has continued during the financial year.

As a result of this, in the fourth quarter, provision was made for a non-recurring item of SEK 23 million for rationalisation of the number of stores in Finland and Poland.

“The work of seeking attractive store locations in existing markets and expanding ecommerce is proceeding according to plan,” the fashion retailer said. (AR)

Fibre2fashion News Desk - India

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